BP Sells 65% Stake in Castrol to Stonepeak for $10 Billion
Filing Summary
BP p.l.c. has agreed to sell a 65% shareholding in Castrol to Stonepeak, valuing the enterprise at $10 billion. The transaction is expected to generate net proceeds of approximately $6 billion for BP, which will be used to reduce net debt. The sale forms part of BP’s $20 billion divestment program, with completion anticipated by the end of 2026, subject to regulatory approvals. BP will retain a 35% stake in a new joint venture, maintaining exposure to Castrol’s growth plans. The transaction includes minority interests in Castrol India Limited and other regions.
BP p.l.c. has entered into an agreement to sell a 65% shareholding in Castrol to Stonepeak at an enterprise value of $10 billion. The transaction is part of BP’s strategy to simplify its portfolio and strengthen its balance sheet. BP will retain a 35% stake in a new joint venture, allowing continued exposure to Castrol’s growth plans. The transaction is expected to be completed by the end of 2026, pending regulatory approvals.
The financial terms of the transaction indicate total net proceeds to BP of approximately $6 billion. This includes around $800 million for the pre-payment of future dividend income on BP’s retained stake and other adjustments. The implied total equity value of Castrol is $8 billion after accounting for joint venture minority interests and other debt-like obligations. The proceeds will be fully utilized to reduce BP’s net debt, aligning with its divestment program goals.
Operationally, the transaction involves the creation of a new joint venture, with Stonepeak holding a 65% stake and BP retaining 35%. This structure allows BP to maintain a strategic interest in Castrol’s operations and growth trajectory. The joint venture will focus on leveraging Castrol’s market position and product portfolio to drive future growth. BP will appoint two board seats in the new entity, ensuring continued involvement in strategic decisions.
The timeline for the transaction completion is set for the end of 2026, subject to necessary regulatory approvals. The agreement includes a two-year lock-up period for BP’s retained stake, after which BP has the option to sell its 35% interest. This timeline aligns with BP’s broader strategic objectives and its ongoing divestment program.
The parties involved in the transaction include BP, as the seller, and Stonepeak, as the buyer. Stonepeak is an investment firm specializing in infrastructure and real assets, with a focus on creating value through strategic investments. BP’s role will transition to that of a minority stakeholder in the new joint venture, maintaining influence through board representation.
In the context of the market, this transaction is significant for BP’s divestment strategy, which aims to generate $20 billion in proceeds. To date, BP has completed or announced divestments totaling approximately $11 billion. The sale of Castrol’s majority stake is a critical step in achieving these financial targets and reducing net debt. The transaction also includes minority interests in Castrol’s operations in India, Vietnam, Saudi Arabia, and Thailand, reflecting the global scope of Castrol’s business.
Stonepeak is a prominent investment firm focusing on infrastructure and real assets. It aims to create value for investors through strategic investments in sectors such as energy, transport, and logistics. Stonepeak’s acquisition of a majority stake in Castrol aligns with its investment strategy and provides an opportunity to support Castrol’s growth alongside BP’s continued involvement.
BP is a global energy company focused on delivering energy solutions while transitioning to a lower-carbon future. The company is actively pursuing a strategy to simplify its portfolio, strengthen its balance sheet, and focus on integrated businesses. The sale of Castrol’s majority stake is part of BP’s broader plan to optimize its asset base and enhance shareholder value.